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The world of IPOs is getting off to a good start in 2011. We have two companies coming public this Wednesday morning after the deals have formally priced.  The first to look at is the larger Nielsen Holdings N.V. (NYSE: NLSN) and the second is Demand Media Inc. (NYSE: DMD).  Both are highly anticipated and both managed to secure premium pricing.

Nielsen Holdings N.V. (NYSE: NLSN) priced 71.428+ million shares at $23.00 per share.  The price range was just yesterday put at $20 to $22 per share.  Investors will want to know that this is a re-IPO from private equity and that the $1.6+ billion in proceeds will be used to pay down part of that monster debt load of over $7.5 billion.  Nielsen was acquired in 2006 by a private equity-backed group including The Blackstone Group (NYSE: BX), KKR, and Thomas H. Lee Partners. These private equity firms have piled on debt with high yields and that should concern many investors.

In addition, Nielsen has priced a concurrent offering of $250 million in convertible bonds which have a mandatory conversion on February 1, 2013 with a 6.25% coupon and a $50.00 conversion will equate to principal amount of bonds between 1.8116 and 2.1739 depending upon the value at the time.

J.P. Morgan and Morgan Stanley were the joint book-runners.  Its top ten clients accounted for about 23% of the total 2009 revenues of $4.8 billion with a net loss of $427 million. Nielsen is likely going to be used as a private equity template going forward as a benchmark for just how much leverage private equity sellers can have as leverage on the books of companies they bring public again.

Demand Media Inc. (NYSE: DMD) may be controversial for some, but the firm increased its offering and its price.  The operator of how-to websites sold 8.9 million shares at $17.00 per share, above the most recent range of $14 to $16 per share for what was supposed to be 7.5 million. Of the offering, 4.5 million shares are being sold by the company as was first expected, but insiders are now selling 4.4 million shares rather than 3 million shares.

Demand Media is likely to have one of the highest market capitalization rates in years for an internet company IPO.  The company has thousands of freelance writers and video makers for information and how-to articles or instructional content.  There is some controversy here.  First, it pays its freelancers peanuts.  The more important issue was brought up by Herb Greenberg of CNBC, where he pointed out that Demand Media has capitalized its content costs rather than taking the expense all at once as is normal practice.

The offering is being led by Goldman Sachs and Morgan Stanley, followed by co-managers of UBS, Allen & Company, Jefferies, Stifel Nicolaus Weisel, RBC Capital Markets, and Pacific Crest. For 2009 and the nine months ended September 30, 2010, the company reported revenues of $198 million and $179 million, respectively; and losses for the same periods were $22 million and $6 million, respectively with operating loss of $18 million and $3 million.

Today marks one of our Top 17 IPOs to Watch for 2011.

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JON C. OGG